Emergency Powers, Hurricanes and Coronavirus
In light of the ongoing coronavirus pandemic and the quickly approaching hurricane season, which starts June 1, many Florida condominium and homeowner associations are facing critical and unique issues regarding the operation and governance of their communities. Both the Condominium Act (Chapter 718, Florida Statutes) and the Homeowners’ Association Act (Chapter 720, Florida Statutes) contain certain emergency powers.
All board members, officers, property managers and residents alike should make sure that they understand their rights and obligations in emergency situations. Below are some of the more common questions that have, and will continue to, arise during this time.
What are the emergency powers of a community association?
Chapters 718 and 720 contain fairly broad “emergency powers” which may be exercised by an association’s board of directors without the approval of its owners. By way of example, those statutory powers include:
- Conducting meetings with notice given as practicable, such as through the internet, postings and any other reasonable means under the circumstances;
- Canceling and rescheduling meetings;
- Shutting down elevators, electricity, water, sewer, security systems and air conditioners;
- Making certain portions of the property unavailable for entry or occupancy by owners, family members, tenants, guests, agents and invitees;
- Mitigating any damage, including contracting with vendors for services;
- Levying special assessments; and
- Borrowing money and pledging association assets as collateral.
When can an association’s board exercise the statutory emergency powers?
The statutes require certain conditions to be met before a board can properly exercise the emergency powers. In particular:
- The association’s governing documents must not prohibit the board from exercising the statutory emergency powers;
- While it is rare for a given set of governing documents to include such a prohibition, it is important for every board to have qualified legal counsel carefully review their governing documents in order to make sure.
- The emergency powers must be exercised in response to damage caused by an event for which a state of emergency is declared;
- A board’s authority to exercise the emergency powers is limited to that time reasonably necessary to: (i) protect the health, safety, and welfare of the association, as well as the owners, the residents and their guests; and (ii) mitigate further damage and make emergency repairs.
May an association board exercise these powers in response to COVID-19?
As discussed above, the statutes permit a board to exercise the emergency powers “in response to damage caused by an event for which a state of emergency is declared.” When these statutes were originally enacted, the emergency powers were ostensibly intended to apply when an association has suffered (or is under the threat of suffering) physical damage due to hurricanes and other similar natural disasters. Therefore, the issue as to whether a board may exercise the emergency powers in response to a virus or other public health crisis, such as COVID-19, is not specifically addressed by the statutes and has not yet been decided by the courts.
The legislature is expected to consider the expansion of the emergency powers so that they include situations involving pandemics and other “unnatural” disasters. In the meantime, however, it would at least be legally defensible for a board to invoke the emergency powers under these circumstances, as long as those powers are wielded in a reasonable manner and are commensurate with what needs to be done to help protect the health, safety, and welfare of the community’s residents. This is because the circumstances surrounding COVID-19 arguably satisfy the preconditions set forth in the statute, and the board has a fiduciary duty to take appropriate action for the protection of the community’s residents. As long as the board exercises its powers reasonably and relies upon the advice of competent counsel, the individual directors should be protected under the business judgment rule.
Do the emergency powers allow the board to close the common facilities, such as the gym and pool?
In general, the common facilities for most communities are operated, regulated and governed by the board of directors, and a community’s board generally is authorized to adopt more restrictive policies than those imposed by the government or a municipality. Therefore, depending on the circumstances, a government-declared state of emergency might not necessarily be required for the board to close the common facilities (although it is not recommended that the board closes the common facilities outside of a legitimate and lawful reason for doing so).
Of course, depending on the nature of the emergency (and the city or county in which the community is located), the board might not have a choice in the matter. For example, in response to COVID-19, many municipalities ordered the closure of all community pools, gyms and similar recreational areas. Under such circumstances, the board should follow the mandates of all federal, state or local authorities.
However, outside of a government mandate to close the common facilities, the more relevant question might be whether a board should close such facilities in response to an emergency. The ultimate goal for a board of directors should be to protect the health, safety and welfare of the community’s residents, guests and staff. Depending on the circumstances giving rise to a particular emergency, it would be appropriate and justifiable to close the common facilities until such time that the applicable risks no longer exist, and the board’s decision in this regard would likely be protected under the business judgment rule. If the board decides to keep open certain of the common facilities notwithstanding such risks, then the board should implement policies and strategies to minimize those risks to the greatest extent possible (e.g., in the context of COVID-19, the board may want to adopt restrictions on the number of persons that may use a facility at any given time, ensure that the facilities are frequently cleaned and sanitized, and keep adequate supplies of soap, hand sanitizer and paper towels nearby).
Finally, before making any risk-management decision, the board should consider speaking with its insurance agent to determine whether the association has adequate coverage for claims under the applicable scenarios. Ultimately, the logistics, related costs and possible liability concerns may persuade a board to temporarily close the common facilities.
Do the emergency powers allow the board to restrict guests?
This is a much more difficult question than the closure of common facilities. A community’s board of directors does not generally have the inherent authority to regulate who a resident may invite to his or her private home. Unless there is specific language in an association’s governing documents which permit such regulation or which authorize a board to adopt such regulation, the board may have to rely on the statutory emergency powers.
Under Chapter 718, the board for a condominium association may determine any portion of the condominium property to be unavailable for entry or occupancy based upon advice of emergency management officials or other licensed professionals. Because the definition of the term “condominium property” appears to include both the common elements and the individual units, the board for a condominium association may be able to restrict guests if the required preconditions in the statute are satisfied.
However, Chapter 720 is a little different. It provides that the board for a homeowner association may determine any portion of the association property to be unavailable for entry or occupancy based upon advice of emergency management officials or other licensed professionals. While Chapter 720 does not expressly define the term “association property,” it is generally understood to mean the property that is owned or operated by the association (such as the common areas) rather than the property owned by the owners (i.e., the individual homes)—although this issue is subject to potential dispute given the lack of a statutory definition.
Notwithstanding, a board should resist the urge from imposing a complete ban on all guests whatsoever. Outside of extraordinary circumstances, and at a bare minimum, health care providers, care givers and emergency contractors should be afforded access to the community.
However, even if it is determined that a board cannot restrict guests, it would be appropriate and reasonable to urge residents to reduce the number of guests (and contractors providing non-essential services) that they invite into the community.
Ultimately, there are several factors which must be considered before a board decides to restrict guests, including, but not limited to, the nature of the community, the association’s governing documents, the circumstances giving rise to a particular emergency, and the existence of any orders from government authorities. These issues should be evaluated on a case-by-case basis.
How should association meetings be handled in an emergency?
The emergency powers in both Chapters 718 and 720 permit a board to cancel and reschedule association meetings. An equally important issue, though, is whether association meetings should be cancelled. Certainly, if the purpose of the meeting is not essential or urgent in nature, then it may be advisable to postpone the meeting until the applicable risks no longer exist.
However, in circumstances where a board believes that a membership meeting is necessary, there are ways to conduct the meeting even if an in-person meeting is not practical or advisable. For example, the board can institute an electronic voting system for matters to be voted on by the association’s owners, or the board can instruct owners to drop off their ballots and other voting documents in a ballot box or deliver them by mail or email (if the situation permits). Additionally, in certain situations, the law permits owners to take action by written agreement in lieu of a meeting.
For board meetings, the alternative options present unique issues. The statutes permit a director to participate in a meeting via telephone, real-time videoconferencing or similar real-time electronic or video communication, but the statutes do not contemplate the remote or virtual attendance by owners at a board meeting. However, if the board is able to hold a virtual meeting that affords owners the same rights that they would normally be given at an in-person meeting (e.g., the use of a speaker or application so that the conversation may be heard by all persons desiring to attend, as well as the right of the owners to speak with reference to all agenda items), then a reasonable argument can be made that the board acted reasonably and in good faith, that the rights of owners were not abridged, and that the procedural requirements were satisfied. Of course, the option of a remote/virtual meeting is not perfect as some owners might not have access to the technology necessary to participate in a remote/virtual meeting.
Are the requirements for giving meeting notices to the owners the same in an emergency? Can an emergency board meeting be closed to the owners?
The emergency powers in both Chapters 718 and 720 permit meeting notices to be provided “as is practicable” and include examples, such as through the internet, regular mailings, conspicuous postings, and any other reasonable means under the circumstances. Therefore, the emergency powers at least appear to suspend the requirement to provide notice by regular mail if it would not be practical under the circumstances.
Additionally, the statutes excuse an association from posting the generally required 48-hour notice in advance of a board meeting in the event of an emergency. However, the Florida Department of Business and Professional Regulation has previously ruled that in order to qualify for this exclusion, the circumstances giving rise to the emergency must have been unforeseen, and it must be shown that a delay would present a genuine threat to the continued well-being of the community or the owners.
Notwithstanding, the statutes do not include a special emergency power to hold closed board meetings. Generally, a board meeting must be open unless the meeting is with the association’s attorney to discuss proposed or pending litigation, or unless the meeting is held to discuss personnel matters. The emergency powers do not appear to otherwise affect the “sunshine laws.”
What steps should an association take if a resident has tested positive for COVID-19?
If an association becomes aware of a resident who has tested positive for COVID-19, the association’s management will want to run through a few questions with that resident (to the extent he/she is willing and able to speak). Most important will be determining whether the resident had contact with other residents or staff over the past 14 days, as well as determining what common areas and facilities that he/she may have used during that time. Additionally, the association will want to take any steps necessary to safely assist the resident in self-quarantining and to otherwise contain the virus as much as possible.
Depending on the circumstances, the association may also want to engage in appropriate deep cleaning with agents that kill coronavirus (preferably through a licensed, third-party vendor), consider closing certain common areas to the residents, and remind all residents to comply with all CDC and local health guidelines (including, but not limited to, social distancing). Ultimately, the board should exercise calm judgment in the face of what may be hysterical reactions from some of the residents.
While most boards are fully acquainted with their rights and obligations regarding an association’s day-to-day operations, managing the community in the event of an emergency is likely to be unchartered territory. When it comes to viral pandemics in particular, these are unprecedented times for everyone involved, and there is very little guidance for community associations to rely upon in addressing the ever-changing events before us.
In the event of a natural disaster, health crisis or other emergency, a community’s residents will look to the board of directors to take the proper steps to keep them safe. That is why a board’s communication (early and often) with the residents is key for the welfare of everyone involved. Likewise, it is never too early for a board to develop a disaster plan and/or emergency protocols in order to minimize potential risks and exposure to its community.
That being said, each community is unique in its own way, and there is not a “one size fits all” solution for managing an emergency. During difficult times, it is imperative for an association to consult with a competent community association attorney in order to analyze the specific circumstances affecting the community.